Russia joins debt relief initiative on bilateral basis

MOSCOW, February 9 (RIA Novosti) - Russia has joined an international initiative to cancel the debt of poor countries on a bilateral basis, Finance Minister Alexei Kudrin said Thursday.

Kudrin said the other members of the Group of Eight club of rich nations, of which Russia currently holds the rotating presidency, had already implemented an initiative for 100% bilateral debt relief to Heavily Indebted Poor Countries (HIPC).

The HIPC debt initiative was proposed by the World Bank and IMF and agreed by governments in 1996 to reduce the external debt of the world's poorest countries, and underwent substantial reform in 1999.

The HIPC initiative organizers estimate that the national debt in the 33 countries likely to qualify would be reduced from $90 billion to about $45 billion by the initiative, combined with other debt relief measures.

Russia is considering the full cancellation of bilateral debt owed by poor countries in its 2006 budget, which includes an order for the government to set out the procedure for the debt relief program.

Kudrin also said that G8 finance ministers meeting on February 11 in Moscow would discuss the multilateral cancellation of poor countries' debt to the International Monetary Fund, the World Bank, and the African Development Bank, worth a total of $37 billion.

However, the capital of these international organizations has to be increased in order to continue implementing programs to support poor countries, he said.

"This initiative is in the process of being implemented. So far not all countries have reached a decision."

At the meeting in Moscow, Russia will put forward proposals on the procedure and timeframe for increasing the capital of international financial organizations.

On Monday, Kudrin had said Russia intended to write off completely the debts of 16 of the world's poorest countries.

"The total of the possible write-off is $688 million. The relevant documents will soon be submitted to the Russian government," he said, adding that this mainly related to African countries, including Benin, Tanzania, Zambia and Guyana.

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